But on April 9 their plans came unstuck. The group, including known
arms dealers for the Indonesian military and two Indonesian Air Force
officers, was arrested by the FBI as they tried to make the illegal
$US40million ($54million) purchase from an unnamed US company.

Four arms dealers - alleged leaders Hadianto Djoko Djuliarso and
Ibrahim bin Amran, both Indonesian, plus a Singaporean and a Briton - were
taken to Michigan and charged with conspiring to violate the US Arms
Export Control Act. The two leaders were also charged with money
laundering offences. The two officers, both lieutenant colonels, were
deported.

The embarrassing incident comes as Washington gradually lifts a
long-standing arms embargo put in place after the Indonesian military,
known as the TNI, massacred dozens of people in Dili, East Timor in 1992.

Last November, Washington announced the arms embargo would be lifted if
Indonesia's human rights record improved and if the TNI - which is known
to be involved in many other illegal activities including logging,
prostitution and drug running - was reformed.

Just last month, US Secretary of State Condoleezza Rice said during a
visit to Jakarta that Indonesia had made progress in combating military
corruption. As part of these closer ties, a senior Indonesian military
delegation is heading to Washington this week to discuss defence and
security. But, for some in Indonesia, the Americans are clearly not moving
quickly enough.

"What you've got here is an overlap of regimes," said Bob
Lowry, a former Australian military attache in Jakarta and expert on the
Indonesian military. "It's an example of the old system and people
not adjusting to the new realities."

This latest escapade by the TNI, however, is unlikely to damage the
rapidly thawing relations. After all, Washington needs the under-equipped
TNI brought up to strength so it can help combat a rise in Islamic
extremism and the obvious threat this poses to the West.

"America's interest is to cultivate Indonesia again in the context
of the war on terror," Indonesia expert and Australian National
University professor Harold Crouch said.

"They won't be shocked to know there are some crook arms dealers
coming from Indonesia. I think that's well known."

Nevertheless, the incident in Hawaii has the Indonesian government
ducking and weaving. Defence Minister Juwono Sudarsono and the newly
installed head of the military, Marshal Djoko Suyanto, said that of the
weapons being purchased in Hawaii, only the radar system was actually
ordered by the Air Force from Djuliarso's company, PT Ataru Indonesia. The
rest, including the missiles, were for someone else.

"I met with the US ambassador and he understood our
position," the Defence Minister said. "This case is about a
recalcitrant business partner and, indeed, we will review our partnership
[with Djuliarso]"

But many find this denial hard to accept. There's the presence of the
two Air Force officers, statements by the arrested men that they were
acting on behalf of the Indonesian government and, thirdly, the fact no
one else in Indonesia has a need for heat-seeking Sidewinder missiles,
which are used by fighter aircraft to shoot down other planes and cost
about $US80,000 each. Further, the Indonesian military has previously
expressed a desire to buy Sidewinders.

Mr Lowry said he had no doubt it was all done with the knowledge of the
Indonesian Air Force. "The sin is that they've been caught out
because the new regime doesn't allow it," he said. "What they've
been caught doing was quite common until just recently.

"It's quite a large number of missiles. Who the end users of these
things were going to be is one question. Under normal circumstances it
would be the Indonesian Air Force. I can't image who else they'd pass them
on to."

US authorities have stated the case does not involve the exporting of
weapons for terrorism.

The 14-year arms embargo has left the TNI badly in need of new
equipment.

"They [the TNI] are certainly rundown," Professor Crouch
said.

"A lot of their planes are not flying and a lot of their ships
can't go to sea. Technologically they're in a bad state."